When Viktor Orbán is honest: The Hungarian constitution is not a liberal document

It was only today that I managed to find more than an hour to listen to Viktor Orbán’s speech to the honorary consuls who gather every five years in Budapest to reinforce their ties to the country they serve. An honorary consul doesn’t have to be a Hungarian national. For example, I learned that an American professor who teaches in a nearby college in Connecticut just became an honorary consul. Apparently Hungary has honorary consuls in 100 countries, only 54 of which have official Hungarian consular service. In the United States there are 18-19 honorary consuls strategically placed in different parts of the country.

The event took place on September 18 in the chamber that was the home of the Hungarian Upper House before World War II. By all descriptions the consuls found the prime minister’s speech elevating and, although his speech was not interrupted by periodic applause, at the end the audience gave Orbán a standing ovation.

The speech in some ways was quite remarkable. It was a curious combination of surprising honesty and unsurprising falsehood. I doubt that too many people in attendance comprehended the full significance of what they heard.

What did Orbán want to accomplish with this speech? To provide the honorary consuls with ammunition to defend Hungary against foreign criticism. Or at least to explain away Hungary’s bad press in the international media as based on misconceptions. He admitted that these consuls most likely had a hard time in the last three years. Hungarian nationals see their own country differently from those who look at Hungary from the outside. But he offered a few fundamental facts that might make the consuls’ work easier.

Orban konzulok2

First, Orbán tried to explain his government’s position vis-à-vis the European Union. Ignoring the fact that in the last years his anti-European Union speeches have multiplied and become increasingly antagonistic, he tried to convince his audience that he and his government are not euro-skeptics. They are only euro-realists. During the course of the speech it became crystal clear that Hungary has no intention of joining the eurozone and thus adopting the euro as Hungary’s currency. Of course, Hungary is required to join the eurozone eventually, despite the fact that the new constitution includes the statement that “Hungary’s currency is the forint.” Since Hungary is obligated to join the eurozone, avoiding this obligation can be accomplished only by leaving the European Union.

There was another issue about which he was brutally honest. He told his audience that the new Hungarian constitution is not a liberal document because, in his opinion, “a liberal constitution cannot be the basis of the economic renewal of the country.” He admitted that this is “a strong statement, perhaps even debatable,” but this new Hungary he is building cannot be founded on a constitution that emphasizes “the interests of the individuals.” This is a fact that he will not hide from all those countries whose constitutions are based on liberal concepts. One day other countries will come to realize that indeed a “new economic system” cannot be built on a liberal basis. He categorically stated that economic competition and liberalism are incompatible.

He admitted that questioning the validity of individual rights might have given rise to harsh international criticism and huge debates, but Orbán proudly announced that he managed to prevent such adverse reactions by “a political novum” called “national consultation.” I assume you all remember those 13-14 meaningless questionnaires sent out to 8 million Hungarian citizens. One of these inquired about the relationship between the rights of individuals and the rights of the community; 85% of those who answered agreed that both should be included in the new constitution. With that he avoided possible controversy over the new illiberal constitution, or at least so he said.

What can we learn from this speech about Hungary’s breakthrough economic system? Nothing new. Hungary will not be a welfare state but a workfare state. Hungary will handle the economic crisis differently from the rest of the world. Common wisdom holds that after an economic crisis there will be a slow recovery and that as an economy starts to recover investment will grow and with it job opportunities. The Hungarian solution will be the opposite of this sequence of events. They will start with work which will eventually solve the economic crisis. I don’t think that I have tell you how fallacious this argument is. If there is no private investment and the state doesn’t have money, as Orbán admitted in this speech, then only useless public work can be provided. And digging roadside drains financed by public money will never amount to anything. Orbán invoked the example of Roosevelt, but anyone familiar with economic history knows that the end of the Great Depression in the United States wasn’t brought about by FDR’s public work projects.

As I said at the beginning, the speech was a combination of brutal honesty and outright lies. Here are a few lies. In 2010 Hungary was in a worse economic state than Greece. Since then Hungary’s economic policy has been most successful. In the European Union only five countries managed to lower their national debt and Hungary is one of them. This, of course, is not true. In fact, the national debt has grown. It is true that the excessive deficit procedure was lifted by Brussels against Hungary, but the budget is so tight that there is a good possibility that Hungary will not be able to hold the 2.9% deficit currently projected. He repeated the lie that before 2010 only 1.8 million people paid taxes and now there are 4 million. And, not a lie but a conveniently undated forecast, Hungary will be the leading economic force in the region just as it was ten years ago.

And finally, a few interesting comments from the Q&A session. This is always the time that Orbán improvises and comes up with some interesting “facts.” All cities east of Strasbourg are “German cities.” Like, for example, Vienna, Prague, and and even St. Petersburg. There is only one exception: Budapest. The same Budapest where the majority of the population as late as the second half of the nineteenth century was largely German-speaking? Where first there was a German theater and only afterwards a Hungarian theater?

His thoughts on networking were also amusing. For Hungarians networking is a strange idea because what is networking really? Hungarians are friendly and hospitable, but networking is based on “calculation.” One does something for somebody in order to get something in return. This is really alien to the Hungarian psyche. But the world went a different way and, although it is nice to be old-fashioned occasionally, yes, Hungarians must learn the art of networking.

One final word on Orbán’s illiberal constitution. Yesterday, Károly Herényi, the second man in the Ibolya Dávid-led MDF, wrote an article in Galamus. Here is a man who is not considered to be a far-left liberal. On the contrary. He was a member of a moderate right-of-center party. And what does he say? There is no way that Orbán’s constitution can stay after a (possible) victory by the democratic forces. It must go. He considers any attempt by Gordon Bajnai to make a deal with Viktor Orbán a mistake. He suggests holding a referendum on the constitution right after the election to decide its fate.  I agree with him.

Viktor Orbán: Hungary, Hungarians, and the world

I will continue yesterday’s discussion of Viktor Orbán’s speech at Tusnádfürdő/Baile Tusnad because I didn’t cover some important topics. Moreover, at the time of the post’s writing I had access only to Orbán’s speech and not his answers to questions from the audience. Since then I have read a summary of what transpired in the hour and a half after the prime minister finished his speech.

I should emphasize that the Tusnádfürdő extravaganza was organized not by RMDSZ, the largest Hungarian party in Romania, but by the Erdélyi Magyar Néppárt (EMNP) headed by Tibor T. Toró. So, the enthusiastic crowd came from the more radical right in Transylvania, from those who enthusiastically supported or most likely initiated the reburial of József Nyirő whose political sympathies lay with Hitler and later Szálasi. The other important speaker was László Tőkés, who is the chairman of an organization called Erdélyi Nemzeti Tanács which is in close alliance with EMNP.  An RMDSZ politician who was originally chosen to deliver a speech was forbidden to participate.

By way of background, Tasnádfürdő is in the Szekler region. The Szeklers  live in the counties of Hargita/Harghita, Kovászna/Covasna and Maros/Mureş and for a numbers of years have been demanding territorial autonomy which the Romanian majority refuses to grant.

I think László Tőkés’s speech was a window into the mindset of these people.  His speech was sprinkled with statements such as “we now are in a community of the Szekler Autonomous Region” or “we are gathered in Tusnádfürdő of the Szekler Autonomous Region.” These and similar claims give you an idea about these people’s sense of reality.

And as long as I’m bringing up Hungarian minority politics I might as well return to a part of Viktor Orbán’s speech that I didn’t touch on yesterday. It was his close to incomprehensible discourse on the concept of  the “world nation” (világnemzet), a word that at least until now didn’t exist in the Hungarian language. Among the compound words starting with “világ,” “világcég” means “international company” and “világnyelv” means “language widely spoken.” For example, today English is a “világnyelv.”

On the T-shirts: Great Hungary and Even Greater Hungary / Nepszabadság / Malabu

On the T-shirts: “Great Hungary” and “Still Greater Hungary / Népszabadság / Malabu

I guess a “world nation” means that there are Hungarians all over the world but regardless of where they live they all belong to the nation. That is simple enough, but what are we going to do with the following claim? “We must find a way that the Hungarian from Budapest, or rather from Felcsút, the Hungarian who lives in New York or in Argentina will all prosper.”

In my opinion, he can look high and low but he won’t find a way to achieve this, How could he? He has no power over the lives of those who live on a permanent basis in other countries. But it seems that his mind works differently from mine because he claims to have found the key to solving this problem. What is necessary, in his opinion, is “a strong Hungary.” He will draw all these people “into the new political and economic order that is being built by the two-thirds majority.” How, may I ask? But such practical questions don’t seem to occur to his admirers.

The same thing is true about Orbán’s deputy, Zsolt Semjén, who went even further when he claimed that if the Hungarian minorities totally assimilate sometime in the future in Ukraine, Romania, Serbia, and Slovakia, Hungarians altogether will disappear from the face of the earth. What is the connection? Why does the fate of the Hungarians of Hungary depend on the Hungarian minorities in the neighboring countries? There are, of course, no rational answers to these irrational statements, but that doesn’t seem to bother these people.

In the last couple of days I have been listening to a lecture series on the structure and the laws of the European Union. One of the lectures concentrated on the EU’s stages of development from its beginnings. The lecturer emphasized the fact that the Union even today is an entity in constant change. Something still in the making. The trend is toward closer and closer integration, especially since the crisis of the eurozone. Viktor Orbán will not be able to stop this trend and he can only lose this war. He may win a battle or two, but he will not succeed in transforming the European Union to his own liking.

It seems that Orbán was carried away during the Q&A session when he revealed the “secret”of how he fools the European Union. For example, the EU insists on changing certain passages in the new constitution. Eventually the Hungarian government obliges but at the same time they change a few more words here and there. The final result is that the European Union would have been better off if it hadn’t insisted on the changes at all. What upright behavior! And he is even proud of it.

And, continuing my random thoughts, here are a couple of corrections to Viktor Orbán’s figures. He claimed that since 2010 the Hungarian national debt was reduced through his efforts from 85% to 79% of GDP. A lie. Not since the mid 1990s has the national debt been at 85%, and at the moment it is climbing to a new cyclical high. It currently stands at 81.3% of GDP. Paying back the IMF loan early actually means borrowing money at a higher interest rate to repay a loan with a considerably lower interest rate. But according to his admirers, including László Tőkés, sending the IMF packing is a patriotic act.  As Tőkés said, “as in 1989 a young man sent the Soviets home today the same man with graying hair sent the IMF home.” Another lie. Viktor Orbán didn’t send the Russians home in 1989. Their departure had already been arranged between the Németh government and Mikhail Gorbachev’s Soviet Union.

Politics and finances: Orbán’s Hungary today

Judging from the comments, most readers of Hungarian Spectrum consider Sándor Csányi’s spectacular exit from the ranks of shareholders of OTP an event that overshadows all other news, including whatever the current opposition is doing. Perhaps in the long run the panic that took hold of Budapest yesterday following the precipitous fall in the stock price of Hungary’s largest bank might prove to be more significant than any purely political event. However, what happened at OTP cannot be separated from politics.

By now we know that even before Csányi, the CEO of OTP, decided to sell his OTP stock worth about 26 million euros, some other high-level officials of the bank had already gotten rid of theirs. I assume they sold because of the probability that the government will “take care of the Forex loans one way or the other.” The exact way is still not entirely clear, but it is likely that the banks will again be the ones that will have to bear the financial burden of the “government assistance.” This rumor began to circulate about a week ago.

And then came Viktor Orbán’s interview with Margit Fehér of The Wall Street Journal. In this interview Orbán made it clear that the bank levies are here to stay. He has reneged on his initial promise that the very high extra taxes on banks would be needed for only a couple of years. Now the official position is that the bank levies will remain until the national debt is under 50% of GDP–perhaps in ten years “if the euro zone could do better.”

Another political decision that most likely had an impact on the misfortunes of OTP was the government’s abrupt announcement of the “nationalization” of 104 credit unions privately owned but functioning under the umbrella of TakarékBank Zrt. TakarékBank and its credit unions are really the banks of the countryside. They are present in 1,000 smaller towns and villages, which means that they cover about a third of all Hungarian communities. One can learn more about TakarékBank here. One thing is important to know. TakarékBank was run by and with the consent of the individual owners and board members. Clearly, the state wants to take over the whole organization and most likely run it as a state bank. What is happening here is no less than highway robbery. As some people said, the last time something like this happened in Hungary was during the Rákosi period. Sándor Demján, chairman of TakarékBank’s board, swears that they will keep fighting all the way to Strasbourg to prove that what the Hungarian government is doing amounts to nationalization without any monetary compensation.

If Orbán succeeds in the nationalization of TakarékBank, it might pose a serious threat to OTP. All in all, it’s no wonder that OTP officials didn’t think that their investment was safe. The alarm bell might sound in foreign banks as well (don’t forget that Orbán’s plans include a banking sector that is at least 50% Hungarian owned), and if that happens the whole banking sector might collapse. But I guess that would fit in with Orbán’s goal of tearing down all the carry-overs from the past and replacing them with his own original creations.

Let’s return now to the interview Orbán gave to The Wall Street Journal. Some of his statements are just a regurgitation of what he said in his rambling speech to the foreign ministry officials about a week ago but this time in even stronger language. For example: “The future of Europe is Central Europe” and by “now we are once again part of [this] powerhouse.” He also repeated some of his often used lines about the nonexistent strides Hungary has made since he took over: the national debt is falling, foreign trade is rocketing, Hungary no longer needs “other people’s money,” unemployment is falling, and finally that when he took office only 1.8 million people paid taxes but now that number is “close to 4 million.” No one has any idea where Orbán got his figures about the number of taxpayers, but they bear no resemblance to reality.

The interview is a rare self-portrait that could be the topic of another post, but here I would like to bring up two points.

This is the first time, at least to my knowledge, that Orbán openly declared that he really doesn’t want to join the eurozone. This despite the fact that Hungary is obligated to adopt the euro as the country’s currency since it was part of the conditions for membership in the European Union. But today Orbán thinks that Hungary “should exploit the advantages of not being in the eurozone.” I was already suspicious when he insisted that the Constitution should include a sentence stipulating that Hungary’s currency is the forint, but in the interview he was quite explicit on the subject: to change the constitution’s declaration that Hungary’s currency is the forint “will require a two-third vote of Parliament. So, to join the euro will require a strong, unified majority. This guarantees that it will not be a divisive issue. Whether Hungary joins will depend a lot on how well the new, integrated eurozone functions.”

And finally a point that might interest amateur psychologists. Orbán said: “When you have to save your country, to renew your country–that is when a job like this is appealing to someone like me. This is a real challenge, not just like reorganizing a bureaucracy. People like me, we like to do something significant, something extraordinary. History has provided me that chance. Actually, it provided it three times. I’ve always gotten historical challenges as a leader. When things are going well, I seem to lose the elections, because the people don’t need me anymore.” There is a Hungarian saying “A próféta szólna belőled!” meaning I hope your prophecy comes true. But all joking aside, it seems that Orbán is not confident about winning the next elections. He is afraid that all his extraordinary accomplishments will only make an opposition victory more likely. I guess the winning campaign slogan, contrary to everything we know about electorates, would be: “If you’re better off than you were four years ago, throw the bum out!”

Viktor Orbán, the economist and the foreign policy expert

The consensus in Hungary is that Viktor Orbán’s speech before the Hungarian diplomatic corps and representatives of the foreign embassies was more muddled than usual.

Contrary to what I thought yesterday, Orbán didn’t read his speech that lasted, by the way, almost an hour but spoke extemporaneously. Since he hardly ever dares to speak at such length without a written text, he has little practice in the art of spontaneous oration. That might be one reason for the confused nature of his message.

The second reason is, and I guess this is the real problem, that foreign policy, international relations, diplomacy are not strong suits of the Hungarian prime minister. Unfortunately, due to Viktor Orbán’s political omnipotence, Hungarian foreign policy is entirely within his purview. A mini foreign ministry was created inside the Office of the Prime Minister; Foreign Minister János Martonyi can either twiddle his thumbs or try to explain away Orbán’s alienating statements.

First, some general observations about the speech. Orbán looked less haggard than usual. Perhaps the reason for his healthier countenance was a four-day vacation in Croatia accompanied by his body guards. The newspaper report made no mention of his wife and children. What it did mention was that he insisted on having a room in which he could watch a Hungarian sports television station and MTV!

Viktor Orbán claimed that, before delivering the speech, he consulted with Péter Gottfried, an old hand at the Foreign Ministry who served almost all governments since the change of regime and currently foreign policy adviser to Orbán. Mind you, he was already in a high government position during the Kádár regime. Gottfried seems to have warned the prime minister to stay clear of certain subjects, but Orbán didn’t listen. Perhaps he should have.

I was somewhat surprised about Orbán’s repeated claim that those present, including he himself, were at one time or another “intellectuals,” “members of the intelligentsia.” The implication was that, due to his intellectual prowess, he is a better judge of the current economic and political situation in the world than (mercifully unnamed) others.

He also tried to be funny, but his sense of humor always has an edge to it. It often involves the degradation of someone else. In this case the butt of his jokes was János Martonyi. Right off the bat he announced that “the danger no longer exists that the foreign minister will give the prime minister’s speech [but] if some of the questions require his competence he should without any fear take part in this consultation.” Isn’t that generous of him!

At least this year he allowed the European Union flags to be displayed unlike last year / Népszabadság, Photo Simon Móricz

At least this year he allowed the European Union flags to be displayed, unlike last year Népszabadság, Photo Simon Móricz

The complete speech, unfortunately without his responses to the questions, is now available on the prime minister’s website. It is unfortunate because some of the juicier remarks about Russia, Germany, and the United States were delivered during the question-and-answer period.

In the body of the speech he spoke at length about the accomplishments of his government. Allegedly he dwelt on this subject only because he is supposed to follow tradition, but he is never shy when it comes to his alleged achievements. The list he offered to the ambassadors was the usual fare, complete with the usual lies.

We know that the national debt is not lower today than it was three years ago. We know that Hungary’s self-financing through the financial markets is more expensive than getting a loan from the IMF and the EU. We know that the IMF loan is not “dole.” We also know that the situation of the forex borrowers is not solved and that unemployment didn’t decrease.

After his lengthy introduction Orbán began talking about the financial and economic crisis of the European Union and pondered the nature of this long-lasting recession. The outstanding question, according to him, is whether this particular crisis is just one of those periodic crises characteristic of market economies or whether it is the beginning of a permanent and steady decline of the European Union. He didn’t give a specific answer to this question, but given Orbán’s earlier references to the decline of the West, we can be pretty confident that he considers the current economic situation in Europe the beginning of the end.

But if this is Orbán’s “Spenglerian” vision, the rest of the speech is pretty incomprehensible because he began talking about the necessity of a strong eurozone on which Hungary is economically dependent. Right now it is the sluggish eurozone that is holding Hungary back. In brief, Hungary’s poor economic performance in the last three years is due to the failures of those Brussels bureaucrats who don’t seem to understand that it is Viktor Orbán who has the key to success. They are stuck in the mud; they keep insisting on the same rules and regulations for everybody and they call this “predictability.”

Yes, we know that the unpredictability of Hungarian legislative moves over the last three years wreaked havoc on every facet of life in Hungary and that it especially did a lot of harm as far as foreign and domestic investments were concerned. Companies never knew what was coming next. One day levies on banks, the next day on telecommunication companies, the following day on utility companies, one can go on and on. But, claims Orbán, the crisis will never end without what he calls “selectivity.” You select your victims almost at random. According to Orbán, this unpredictable behavior is the secret of his success, without which the western nations will never in this stinking life (büdös életben) get out of this crisis.

He outlined another theory of his, again connected to his being an intellectual. The European Union made a mistake when it waited until 2004 to allow the ten central-eastern European nations to join the Union. If it had moved in 1995, it is possible that the EU could have completely avoided the financial crisis brought over the Atlantic from the United States. He put forth this theory based on the current situation. If we look around in the European Union, only those countries that joined the Union later show any economic growth. (He conveniently forgot about Hungary’s track record.)

And finally, he talked about his conflicts over sovereignty with the European Union. The media describe this conflict as a war of independence. Actually he likes this term, but he is not fighting against the European Union but is fighting for the maintenance of a correct balance between union and national rights. The EU cannot change the rules. Right now a stealth attempt at federalization is taking place. Of course, this is also nonsense because the founders of the European Union from the very beginning envisaged ever closer relations among the member states that might eventually result in a United States of Europe.

Out of this mumbo jumbo I tried to figure out what Orbán really wanted to say. Basically, he condemned both the methods and the economic principles that politicians and economic experts in the European Union apply. They are dead wrong in demanding predictability and traditional remedies. With these policies they retard the Hungarian economy and the economies of other Eastern European nations that are the engines of growth in Europe.

With this attitude the cold war between Hungary and the rest of Europe will not come to an end any time soon. Unless, of course, the Hungarian people become tired of their intellectual prime minister next April.